Recalling 9.6 million batteries could have that effect on a company's bottom line

Those who have been following the news know that Sony has
seen better days. Sony revealed to investors that net income for the year will
decline 35 percent to 80 billion yen (US$675 million) from a year earlier,
great short of the July forecast of 130 billion yen. Operating profit will fall
62 percent to 50 billion yen (US$420.6 million) this fiscal year, while the
sales forecast was kept at 8.23 trillion yen (US$69.2 billion).

Reasons cited for the dive in profits are fairly obvious.
Sony CFO Nobuyuki Oneda said in this mini report that a total of 9.6 million
Sony-made PC batteries which were found in Dell, Lenovo, Apple, Toshiba,
Matsushita/Panasonic,
Fujitsu, Sharp and Sony's
own notebooks could be subject to the company's global recall. Oneda said
replacing the cells will cost 51 billion yen (US$429 million).

"The cost of the recall is our best estimate,"
Nobuyuki Oneda told reporters. "It may rise or fall."

Other reasons behind Sony's big financial revisions came
from PlayStation 3. Sony announced at the Tokyo Game Show that the 20GB variant
of the PlayStation 3 would receive a 20 percent price cut even before it hit stores
and that it would include an HDMI connection that was previously reserved for
the more expensive 60GB version. While this was good news for consumers, to
investors it meant a more costly machine to produce. PlayStation 3 sales
projections were also cutback due to the delay of the European launch.